Separation and Divorce

Scenario: Separating or Getting Divorced

Both separation and divorce can be very traumatic experiences and, if you’re reading this post, perhaps you too are going through a difficult time. Unfortunately, this is not the time to ignore your finances. We trust that this post will provide you with a basic understanding of the financial side of your affairs. Once both parties have come to an agreement, we would be happy to assist with the settlement of property.

We understand that when a couple separate it can often be an emotional, expensive, and drawn-out process; particularly when lawyers are involved. Fortunately, this is not always the case, with some couples actively seeking an amicable resolution where both parties win.

How Do These Arrangements Work?

In many separation cases, one of the parties to the loan wants to keep the investment property or the family home. Generally, if a loan changes, or the names on the title change, a bank will require that the loan be reassessed. It’s highly unlikely that you will be given the option of just taking someone’s name off a loan and carrying on as usual.

Perhaps the easiest way to think of this process is that the house is being sold, and someone (you) wants to purchase it. So, at the very minimum, if a person wishes to retain a property they must –

Demonstrate to the bank, or other lender, that the new applicant is capable of servicing the new debt, on their own; and

Employ the services of a conveyancer to attend to the Transfer of Property.

Let’s Have a Closer Look at an Example

You have a house worth $500,000, and you currently owe $200,000. Currently, both the loan and ownership of the house are in joint names. As part of a separation contract it’s agreed that one party to the loan wants to keep the home, with the other party receiving $150,000. So now we have a Transfer of Ownership, with the new loan in the new owner’s name, solely, totalling $350,000. Now the new owner must demonstrate that they are capable of meeting the repayments on a $350,000 loan, based on their banks assessment criteria.

Is this something you might be considering? Are you unsure as to whether you would be approved, and able to keep the house? Why not give us a call? We are very happy to discuss your options with you.

Stamp Duty Requirements

The question of stamp duty is best discussed with a conveyancer because that is their field of expertise; however, based on our extensive experience, we’re happy to share some basic information that often applies –

If you and your partner are both owners of the family home and you wish to keep the property, you should be able to transfer the home into your name without stamp duty costs. This is a bonus, because you’ll be saving thousands of dollars.

If you own multiple properties (including investment properties) and you wish to transfer some of these properties into your name, solely, then we believe you may be eligible to waive stamp duty charges. This might require a Family Court order; however, you should seek advice from a conveyancer or lawyer. Again, this will save you thousands of dollars.

If you are currently in the middle of a separation, or trying to determine your options, and you require more information on whether you can, or cannot, retain a property, please don’t hesitate to call us. We’re here to help you in any way we can, so call or email for our assistance.

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About Us

SMBIA was established in January 2015 by husband and wife entrepreneurs Ray and Cilla Hardy, who finally decided to use their extensive IT and Communications experience to help people who were searching online for mortgage finance assistance.